Alright, so those that read the first one, please excuse my n00b excitedness.

So, I go through my setup again, and I correct the latency etc... Then I start up in Live and realise that I have never tried to do what I did in Live. So the short of it is this:

The setup I've done works well. Traktor and Live are in sync, SoundFlower is carrying my audio from Traktor into Live and everything jives.

The effect automation looping works in Live too, and a hell of a lot easier than it does in Logic. So, the brief of this is turn on the arrange looping in Live and create the automations you want for whichever effect you want on any given track in the arrange section. Then the effect can be turned on and off from the effects window, dry/wet, etc.

One thing I am curious about is in the arrange view, is it possible to set loop locators? i.e. can I create a series of loops in the arrange that can be swapped with the press of a button, basically cue point juggling of automation loops?